Enviva ( NYSE: EVA ) -5.7% in Wednesday's trading after plunging as much as 8% following a negative report from Blue Orca Capital, which said it is short the stock because "EBITDA is inflated, it will cut its dividend, and newly discovered data suggests... the company is flagrantly greenwashing its wood procurement."
Enviva's ( EVA ) claims to be a pure-play ESG company is "nonsense on all counts," according to Blue Orca, "a product of deranged European climate subsidies which incentivize the destruction of American forests so that European power companies can check a bureaucratic box."
The company is "a dangerously levered serial capital raiser whose deteriorating cash conversion and unprofitability will drain it of cash next year," Blue Orca said.
Enviva ( EVA ) "faces two critical upcoming tests" - centering around its cash conversion rate during H2 2022, and its ability to continue accessing external capital from debt markets as its bond prices sell off similar to the panic of 2020 - Daniel Thurecht writes in an analysis published on Seeking Alpha .
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Enviva plunges after Blue Orca short report dubs 'latest ESG farce'